Insights

The EUR has fallen to its lowest level in nearly three months after ECB
Vice President Constancio said policy makers are prepared to add further
monetary stimulus if needed. His
statement followed a very anemic GDP report for the first quarter (0.2% versus
the expected 1.1%).

The EUR is weaker today vs. the USD (5-week low) after the release of an
anemic German investor confidence report that has now declined for a fifth straight
month, fueling speculation the ECB may be forced to take measures to boost the
region’s economy.

We close the week with the USD slightly stronger as investor risk appetite is off the table today via the shrinking global equity markets. On the economic release front, there’s very little to focus on, as most reports were as expected.

The USD is little changed from yesterday’s levels despite a very positive jobless claims report this morning. The report came in down 32k to 300k, which is the lowest number of new jobless claims since the last recession.

The USD is trading at its weakest level in nearly five months vs. most of the majors amid speculation that today’s release of the minutes of the Federal Reserve’s March meeting may undermine near-term bullish sentiment that fed the recent USD rally.

The USD continues to slide against the majors via technically-driven levels and continued concern over last week’s anemic U.S. jobs report. With U.S. Treasury interest rates still hovering close to their recent lows, emerging market currencies are benefitting as global investors’ appetite for yield via “risk-on” trading (USD negative).

We open the week with the USD slightly weaker against the majors as the ECB policy makers signaled that recent deflation risks in Euroland seem to be contained, reducing speculation of a fresh round of bond-buying to boost prices and economic growth.